‘Hexaware has a sharp focus on automation’

Mid-tier IT services firm Hexaware Technologies has been growing steadily over the last one year by focusing on getting large clients and deliver new services such as automation and process transformation. Chief Executive R Srikrishna talked to BusinessLine on how the company is betting big on automation even if it means cannibalising its own business. Edited excerpts:

How is automation impacting your business?

We have a very sharp focus on what we call cannibalisation, which is automation, but we are calling it cannibalisation because that’s what automation will result in. We are telling we’ll knock off 30 per cent headcount because we think that is possible. The headcount cut has to happen for us to be able to deliver value to customers.

As a non-incumbent, our upside potential is always higher than the downside potential. There is a lot of upside in new customers and with newer opportunities with existing customers.

We think there is significant potential for knocking off people first in BPO, then in infrastructure and applications.

We think the big guys are very scared of doing this no matter of what they say. It is very hard for them to let automation happen. Some of these companies are the size of some small countries. And to make changes there is very hard.

We have no such baggage. We are 11,000 people, we are quick on our feet and we have no fear of cannibalisation because there is way more upside.

Have you so far been able to cut down on manpower because of automation?

I don't think a day will come we'll knock off large number of people due to automation. What will happen is that we'll add lesser number of people, relative to our revenue. A lot of this benefit will go back to customers.

For example, for one of our clients we took their BPO business from India to Atlanta without charging the client anything extra and we are making a lot more money than the people that were doing it from India. We did this by automating over 50 per cent of the work done by the agents.

You created manufacturing and consumer verticals last year. Would you look at adding more verticals over the next one year?

We consolidated a few verticals into manufacturing and consumer vertical. Our short-term focus is not to add any new vertical. There is a lot of headroom in the current ones for us to grow. We are not in pharma and Hitech but we are not necessarily going after those verticals even though we know about the future opportunity there.

Digital contracts are often of very small value and duration. How does that impact your business predictability?

Our focus is on data to digital. We don't want to acquire too many customers. We want a handful whom we can pay good attention to. Small projects are perfectly fine for existing customers. But they become a challenge when that becomes your strategy for new client acquisition.

On the other hand, application transformation or process engineering side of digital are significant long term work and we would focus on such projects.

Over 3-5 years basis, about half of incremental growth has to come from new services. The uptake in growth in our existing customers is all from new services. New service revenue has been the driver for improved growth from existing customers.

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